The Securities and Futures Commission (SFC) has banned Mr Xie Yangxiong, a director of Wansom Asset Management (Hong Kong) Limited (WAML) and Wansom Securities (Hong Kong) Limited (WSL), from the industry for life.
The disciplinary action follows an SFC investigation which found that Xie, who was the only person with control of and access to the bank accounts of WAML and WSL at the material time, was directly responsible for the provision of false and misleading financial information by both firms to the SFC in support of their licence applications in July and August 2018 and their failures to maintain sufficient liquid capital and notify the SFC of their insufficient liquid capital following the grant of their licences.
Specifically, the SFC found that Xie deposited funds into the bank accounts of WAML and WSL he solely controlled to meet their liquid capital requirements. He also provided this information to an external consultant he had engaged to handle their licence applications, knowing the information would be provided to the SFC in support of their licence applications. Shortly afterwards, Xie withdrew the same funds from the bank accounts.
In the circumstances, had the withdrawn funds been excluded from the liquid capital calculation, both WAML and WSL would have been denied licences to carry on regulated activities due to their inability to fulfil the liquid capital requirements applicable to them at the time of their licence applications.
After obtaining the licences, Xie’s withdrawal of funds from the bank accounts of WAML and WSL for his own use resulted in their liquid capital deficits varying from $1.58 million to $3 million from July to October 2018. Xie also failed to ensure that WAML and WSL notified the SFC of their liquid capital deficits within one business day of their liquid capital falling below the required level.
In deciding the sanction, the regulator took into account a variety of factors, including that Xie’s honesty and integrity had been impugned, as well as the need to send a strong deterrent message to the industry on zero tolerance of attempt to mislead the SFC.
WAML and WSL had not conducted any regulated activities before their licences were suspended and no clients were prejudiced by their regulatory failures. Xie has an otherwise clean disciplinary record.
